Budget airline Ryanair will move future investment away from the UK and into its European operations as a result of Brexit, the company said in a results statement on Monday.
Updating investors on its performance in the third quarter of 2016, Ryanair said that the continuing uncertainty around the exact shape of Brexit meant putting large sums of money into UK operations is essentially unwise, and as a result, the company will spend more on its EU operations going forward.
Here is the key passage from the update (emphasis ours):
“While there may be opportunities to expand at certain UK airports (such as the recent extension of our growth deal at Stansted), we expect to grow at a slower pace than previously planned in the UK and will continue to switch capacity into other key markets around Europe. As previously noted, we hope that the UK remains a member of Europe’s “open skies” system. Until the final outcome is known, however, we will continue to adapt to changing circumstances in the best interest of our customers, people and shareholders.”
Ryanair’s affirmation that it plans to pivot investment away from the UK confirms a position it first took around a month after the Brexit vote.
The airline said it would “pivot our growth away from UK airports and focus more on growing at our EU airports over the next two years,” in its first quarter statement released in July 2016.
The Irish firm's CEO Michael O'Leary was a vociferous supporter of the Remain camp in the run-up to Brexit even allowing former Chancellor George Osborne to deliver a speech backing staying in the EU at a Ryanair facility at Stansted Airport.
It also sent an email to over five million of its customers less than three weeks before the vote, urging them to vote for the UK to remain in the EU.
Aside from warning about pivoting away from the UK, Ryanair's Q3 results were disappointing. Profits in the third quarter fell by 8% to €95 million, short of the consensus expectation of €99 million post-tax. Revenues grew 1% to €1.34 billion.
"As previously guided, our fares this winter have fallen sharply as Ryanair continues to grow traffic and load factors strongly in many European markets. These falling yields were exacerbated by the sharp decline in Sterling following the Brexit vote," O'Leary said in a statement.
Shares in Ryanair dropped on the announcement, and as of 8.53 a.m. GMT (4.53 a.m. ET) are around 1.9% lower:
